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  • How Will The 2016 Presidential Election Impact The Real Estate Market?

    September 30, 2016 | Blog Real Estate
  • Presidential Election Impact

    The 2016 presidential election is by far the most uncertain race in our country’s history. Realtors and home buyers will need to take note of the effects that this race will cause in the real estate market. Judging by history, there has been a 2.8% drop in the market where a sitting president is not seeking re-election. Before we even jump into the debate of who is the most suitable candidate, the presidential election impact will certainly be felt the real estate market.

    The uncertainty in this year’s presidential race has led to investors holding back due to lack of clarity and what President Obama will do. History suggests that it has become a norm for real estate market to fall in the final year of the second term of a sitting president. The market seems to do fairly well where a sitting president is seeking re-election. This is mainly due to two factors; continuity and market-friendly policies. We have to agree that the 2016 presidential election is the most hotly contested race as Republicans and Democrats tear to each other, in a battle to claim the world’s most powerful seat.

    What the 2016 presidential candidates are promising?


    Though the magnitude of this year’s presidential election will be felt far and wide, the promises given by both camps can offer a glimpse of hope. Take Donald Trump, for example, in the year 2006; he is believed to have revived a collapsing housing market. He seemed to have realized the potential of the real estate market and influenced investors to jump into the properties markets.

    Fast forward in 2016 the Republican presidential candidate changed his all-business approach and together with his camp they are calling for a minimized government role in housing. They believe that the lesser the government involvement in real estate the more the opportunities for home ownership. This will not only attract investors but will also prevent the housing market to dip. However, if the private investors are not adequately regulated, this could cause inflation in the market.

    On the other side, Democrats presidential candidate Hillary Clinton and her camp have a $25 billion housing initiative. This program is part of a mega $125 billion plan that Clinton has dubbed “$125 billion Economic Revitalization Initiative”. The housing investment programs’ main aim is to provide homeownership to more families.

    According to the Democrats camp, this initiative can be achieved by offering affordable rental houses, assisting in down payments, clarifying lending rules, going beyond the traditional credit scores among other changes. The camp insists that high rents among other stumbling blocks must be dealt with for more families to own homes.

    A recent survey conducted by Redfin, suggest that the general public is not optimistic about the impact of the 2016 presidential elections will have on the real estate market. It may be partly because of the response to the both parties platforms or a general uncertainty, but 27% of those surveyed believe that the elections will hurt the property market.

    Though the majority of homeowners believe the elections will not have any impact on the market, there seems to be a slight increase on those who believe that the elections will affect the market negatively. As the November elections draw ever closer, anxiety is building among the homeowners who are uncertain the direction the market is likely to follow.

    What will be the impact of the 2016 presidential elections on the real estate market?


    A study by Movoto.com shows that there is a 1.5% increase in house prices than the year before the election. The house prices will be 0.8% less in the following year after the election. On average the start of a new president’s term always records a positive increase. Statistics do not guarantee that the 2016 presidential election will follow the trends set earlier.

    Uncertainties and unforeseeable occurrences like a war in faraway countries or even natural disasters can alter the course of the property markets. Rather than investors keeping of the market, they should focus on personal goals and long-term initiatives. As we enter the home stretch of the 2016 presidential election investors, they should also pay attention to new unfoldings as a small change can have an enormous impact on the market.

    We should appreciate that only one candidate will clinch the top job. All we should anticipate doing is support the new president to enhance that the set goals and policies are achieved at the right time to prevent any major adverse effect on the real estate market.